Should You Quit Your Day Job? — Part II

[ QUOTE ]
"But the shares took a pounding on Tuesday, dropping to 105 pence after the company said new poker players were spending less and losing interest more quickly than the hard core of players who helped boost its shares since June."

[/ QUOTE ]

All it's going to take is one big name poker site to go busted and the party is over. Ask the employees of Enron if they thought their money and future was secure. If anyone believes their bankroll is safe in one of these accounts is dreaming. Furthermore, rakeback is no sure thing for the long term, shills won't be in high demand, and bonuses will become harder to capture. Result? It will become more expensive to play.
It won't take much before that super-live 15-30 game at the Wynn or the Bellagio 30-60 looks more appetizing than mutlitabling 30 games of 1-2.

[ QUOTE ]
50k a year before taxes. How fast are you planning to build your bankroll in order to move up to higher limits? 50k a year might pay bills, but your bankroll will never grow! Unless you live at your mom's house.

[/ QUOTE ]

If you can't live on 50K, this may not be the profession for you. One particular fatal flaw of poker professionals, especially many of the brokesters in "Poker Bustouts," is that they moved into higher games instead of residing in the "comforts of their own home," so to speak.

There might be only 5 players in the world who plays as high as 40-80 who has made $100,000 per year over the past ten years. The higher you play, the less chance you have of succeeding. If you are one of the fortunates who makes 50K a year, stay there, because the risks you would have to take to make 100K will eventually destroy you. You can survive playing poker, not retire. If you can survive, this is the greatest life ever. Don't forget....

"Play for today because you might not have that bankroll tomorrow." -Mike "the Bum" Tullis

[TimM]

[ QUOTE ]
All it's going to take is one big name poker site to go busted and the party is over. Ask the employees of Enron if they thought their money and future was secure.

[/ QUOTE ]

I guess that explains why no one invests in the stock market any more. [img]/images/graemlins/confused.gif[/img]

[ QUOTE ]
If anyone believes their bankroll is safe in one of these accounts is dreaming.

[/ QUOTE ]

You make it sound as if you are telling us something new. Anyone who has been around here a fair amount of time should have heard of PokerSpot (ignore the first search result). A well-known 2+2 poster lost over 50K when that site went down.

The death of that site did not kill online poker. If it were Party Poker to fall, obviously it would be a different story, but I think they are in a much stronger financial position, regardless of the recent volatility in their stock price.

Another prominent 2+2 poster had one of his passwords stolen and most of his account gambled away by the perpetrator.

Things happen and those who are prepared and understand the risks can deal with them.

Anyway, my expected win each month is greater than my entire (minimum 500 BB) bankroll. How many B&M pros can say that? If my bankroll were gone tomorrow, I'd recover pretty quickly.

[ QUOTE ]
Furthermore, rakeback is no sure thing for the long term, shills won't be in high demand, and bonuses will become harder to capture. Result? It will become more expensive to play.

[/ QUOTE ]

Once you start moving up, rakeback becomes a smaller and smaller percentage of your income. It helped a lot before, but if it were to disappear now, it wouldn't kill me. I haven't bothered with bonuses in a long time - it's just not worth the effort. I've never played as a prop or "shill".

[ QUOTE ]
It won't take much before that super-live 15-30 game at the Wynn or the Bellagio 30-60 looks more appetizing than mutlitabling 30 games of 1-2.

[/ QUOTE ]

I'm only 4 tabling the 15/30, so I can't imagine this. I could change my mind someday, but I don't think I'd ever try to play live for a living. Getting 1/8th the hands per hour just is not very appetizing to me.

[Sniper]

[ QUOTE ]
All it's going to take is one big name poker site to go busted and the party is over.

[/ QUOTE ]

We are far from the stage where party is going bust. All they said was that 100% year over year growth rates are unsustainable. Doesn't take a rocket scientist to figure that out! Their revenues were *only* up 80%.. thats huge!

[ QUOTE ]
If anyone believes their bankroll is safe in one of these accounts is dreaming.

[/ QUOTE ]

The best sites keep their player bankrolls in segregated accounts.

[ QUOTE ]
Furthermore, rakeback is no sure thing for the long term,

[/ QUOTE ]

Rakeback is simply the cost of player acquisition. There is no reason to believe that affiliates are going away, as their marketing efforts drive customers to the poker rooms, far cheaper than the sites own advertising, on a per player acquired basis.

[ QUOTE ]
It won't take much before that super-live 15-30 game at the Wynn or the Bellagio 30-60 looks more appetizing than mutlitabling 30 games of 1-2.

[/ QUOTE ]

Regular B&M play is only an option for those that live near a poker room. With that not being the case for the majority of poker players, B&M play will never be more appealing to the vast majority!

[ QUOTE ]
There might be only 5 players in the world who plays as high as 40-80 who has made $100,000 per year over the past ten years.

[/ QUOTE ]

The possibility of making $100K+/yr online, is significantly higher than making that much from B&M play.

[StellarWind]

[ QUOTE ]
Furthermore, rakeback is no sure thing for the long term, shills won't be in high demand, and bonuses will become harder to capture. Result? It will become more expensive to play.

[/ QUOTE ]
If times turn hard, online poker rooms will be at each other's throats to capture the declining business. Price competition will appear and the cost to play will go down. This may already be happening--witness the rapid spread of rakeback in the last year.

I'm not saying that the form of discounting will necessarily always be rakeback. Rake cuts, bonuses, player rewards, etc. may all be part of the picture. But there seem to be more poker rooms every day. As the software becomes more widespread and hardware prices drop the cost to enter the business continues to decrease. Consider that any major site that folds may sell its software and equipment at bankruptcy for a nominal amount to a new debt-free site that will have almost no startup cost.

Another likely development is the emergence of service companies that provide back office services (cashier, security, customer care, etc.) for multiple sites. The ability to hire out this work instead of building an organization will be a big time and capital saver for new sites.

The marginal cost to run an extra online table is very small. Online pokerrooms may be facing the same hell that frequently afflicts the airline industry. Airlines will do almost anything to fill empty seats and make a few extra dollars. Often the entire industry is operating in the red because competition has driven prices below fixed costs and cost of capital. This can last for years until enough players are driven out of business to allow the remainder to make a profit.

Online poker rooms have a limited time to make big money. Then it becomes a brutally competitive business with limited pricing power and careful control over expenses. Only the best operators will survive in the long run. If Party doesn't become better run it probably won't be one of them.

[siegfriedandroy]

I gotta go with chez on this one (at least based on this thread alone, which is all ive read). he continues to ask Al some fundamental questions, to which Al never even tries to respond. Perhaps he addressed them thoroughly in the earlier threads? Apparently Chez was not satisfied!

[die_rich88]

here my 2cents..

While I agree with many that the popularity and the fish supply will definitley level off, I do believe poker is here to stay and there will definiltey be plenty of fishes to go around, but in a different kinda way.

By that i mean, in my opinion, the poker playing population will evolve in the next 10-15 years. I think many current casual/semi-serious players will begin to play more forms of poker like 7card, Omaha etc.

This "evolution", in my opinon, will mean that the supply of fishes you find in holdem games will be spread around in all forms of poker. So the quantity of fishes won't change all that much, but the concentration of fishes in each type of poker will be relativey reduced.

So, therefore I believe inorder for person to make money as a pro in the future, he/she would have to be efficient in 2 or more types of poker. The ones who is only proficient at holdem will not be able to make it.

[LImitPlayer]

[ QUOTE ]
You clearly don't want to consider any evidence that goes against your beliefs

[/ QUOTE ]

I am going to go out on a limb here and say that the past experiences of B&M Poker pros are irrelevant. 10-20 years ago what the B & M pros would say in regards to playing for a living would probably be gospel, not today.

If someone were to attempt to play poker for a living today solely in a B & M setting then the wisom of the B & M pros would still be gospel. If someone were to attempt to play for a living today solely online then you can throw that gospel right out the window.

Online poker has to many advantages:

Multitabling: someone who 4 tables of full ring will play 8x the amount of hands a live player will in the same time frame, consider the increase when you have an 8 tabler or a 6 max player.

Table selection: An online player can immediately change tables without having to wait an hour for a seat to open up on another table and when the seat opnes up there is no guarantee the new table will be any better

Note taking and Data mining tools : An online player has immediate access to accurate notes and playing styles he has made on players, even players he has never played against or seen before.

Rakeback: a person 4 tabling the 6 max games can make more in rakeback alone than a live pro playing 10-20 or 15-30

Downsings: A downsing in live play can take 3 months to play thru , online the same downsing will take 2 weeks.

Rake: much less online


There are so many other pluses to playing online that the past experience of B & M pro's don't apply to the online player.

A decent player who can manage his bankroll has a very good shot in making it as a pro online.

My 2 cents

[ QUOTE ]
We are far from the stage where party is going bust. All they said was that 100% year over year growth rates are unsustainable. Doesn't take a rocket scientist to figure that out! Their revenues were *only* up 80%.. thats huge!

[/ QUOTE ]

EXCERPT:

Poker party is over, admits online operator

PartyGaming loses third of value in a day as growth grinds to halt

Nils Pratley
Wednesday September 7, 2005
The Guardian


PartyGaming plunged in value by a third - or £2bn - yesterday after the operator of the Party Poker website warned that the online game's phenomenal rate of growth had virtually ground to a halt in recent weeks.
The revelation came only 10 weeks after the company's four founders pocketed £1bn in cash by selling 21% of the business in London's biggest and most controversial flotation for years.

PartyGaming accounts for half the world's online poker and it confessed the latest quarterly period, starting in July, has seen growth in the industry slow to just 4%.
----------------------------------------------------------

The article goes on and on. Nothing too optimistic to say the least.

Transparency may become a big issue with online poker sites. All it will take is one government to get a hard-on for one of them. There are varieties of accounting techniques available to make things seem rosy. Just ask the Japanese. No one is safe from corporate corruption. There will most certainly be political pressure on this form of gaming in the United States. Everyone knows you can't beat the Feds.

News stories concerning the burgeoning gambling (poker) addiction epidemic among the youth and the senior populations far outnumber anything positive in the gaming world (besides Las Vegas' future earnings potential). In small towns and cities, the message is clear: Kids are getting hooked and gambling addiction is very psychologically similar to drug additction.

"SWEET JESUS! We must stop this in the name of our Lord. It's destroying our community." And so begins the crusade against online poker in the very country where the most idiots reside. Then the universities will ban access to these sites, high school workshops on the dangers of laying it on the line, the increasing difficulty of getting money in your account, etc. If you want a career for the future, try becomng a compulsive gambling counselor.

Online poker is not federally subsidized or state-run like airlines. Airlines also provide an extremely valuable business and leisure service which is in constant demand. The airline industry acts as a modified oligopoly. They collude, buy each other up, keep names because name recognition is important when you are risking your life to go somewhere, drop prices here, raise prices there, etc. Having a successful airline industry is one of the most important factors and indicators of national economic success. It is in a government's best interest to assist. Online poker is a form of gambling entertainment that no one knew about 5 years ago. It is not important to an economy, does not support trillions in GDP, and the livelihood of millions of workers. Now it's hot and a few people made a ton of money. There is absolutely no viable long term strategy in this business. The potential volatility, which has already reared its ugly head, has lenders and investors cringing.

[ianlippert]

[ QUOTE ]
I am going to go out on a limb here and say that the past experiences of B&M Poker pros are irrelevant.

[/ QUOTE ]

I'm going to second that. Not only that but I'm sure that there are lots of people who have played B&M experienced a 10-20K hand upswing and figure they could go pro. They then hit their median and bust out, and then show up on some DVD on the internet.

seriously, 20K hands is 3 months of full time play. Someone playing 10 hours a week at a B&M would take a year to clear 20K hands. If they are playing through a high stakes upswing it would be very easy for them to think they could go pro.

How many times have you heard B&M players whine about how they cannot win online. I got news for you, if you cant beat online you arent a good live player.

[Sniper]

[ QUOTE ]
The article goes on and on. Nothing too optimistic to say the least.

[/ QUOTE ]

I suggest that you read the actual release, rather than misguided press reports!

[ QUOTE ]
There will most certainly be political pressure on this form of gaming in the United States.

[/ QUOTE ]

The pressure on the US is to relax current laws. In the end, the people of the US have the loudest voice, and there is nothing the gov't will do to restrict an activity engaged in by the masses.

[ QUOTE ]
Kids are getting hooked and gambling addiction is very psychologically similar to drug additction.

[/ QUOTE ]

Irresponsible gambling is bad... grinding out profits in online poker is good! Bet with your head, not over it!